Earnings Support Risk Assets, but Limits to Fed Rate Cut Weigh

0517 GMT - ​As long as economic growth outweighs the impact of higher interest rates, corporate earnings can provide support for risk assets​, says Eyb & Wallwitz's Johannes Mayr​ in a note. However, long-duration assets remain vulnerable while the Federal Reserve lacks room to implement significant rate cuts​, the chief economist says. "The sequence of adjustments during the upcoming regime shift will therefore be crucial: if inflation eases first, the environment for bonds and valuations improves; if growth loses momentum first, earnings and risk premiums come under pressure​," he says. Until this question is resolved, the data point toward balanced portfolios with a focus on robust balance sheets and balanced duration​, he says.